A must read book: Economics Unmasked

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Kamran Mofid

24 October 2015

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"Today's neoclassical economist is an emperor with no clothes who's fooled us all long enough."

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“This book outlines the foundations of new economics, where justice, human dignity, compassion, and reverence for life are the guiding values. Contrary to the assumption of mainstream economists that economics is a value-free science, new economics must make its values explicit.”

I came to know about “Economics Unmasked” when I read Prof. Herman Daly’s excellent review*. I then ordered a copy for myself. It arrived two days ago. I cannot explain it adequately how much I am enjoying reading it.

I cannot wait until a later date, when I will be able to share my own review with you. Thus, in my haste and utmost wish to bring this book to your attention, I now wish to share Prof. Daly’s review with you.

Please order a copy of this book. Believe me you will not be disappointed.

Economics Unmasked: From Power and Greed to Compassion and the Common Good

Philip B. Smith& Manfred Max-Neef

First edition- Green Books, Cambridge, Great Britain, 2011

Reviewed by Herman Daly

“Manfred Max-Neef is a Chilean-German economist noted for his pioneering work in human scale development and his threshold hypothesis on the relation of welfare to GDP, as well as other contributions, for which he received the Right Livelihood Award in 1983. Phillip B. Smith (deceased, 2005) was an American–Dutch physicist with a devotion to social justice that led to an interest in economics. Smith died before this collaborative work was completed, so it fell to Max-Neef to finish it, respecting what Smith had done. Although this results in differences in style and approach between chapters, Max-Neef informs us that they both read and approved each other’s contributions, so it is a true collaboration. These differences between the physical and social scientists are complementary rather than contradictory.

As clear from the title, the book argues that modern neoclassical economics is a mask for power and greed, a construct designed to justify the status quo. Its claim to serve the common good is specious, and its claim to scientific status is fraudulent. The latter is sought mainly by excessive mathematical formalism to the neglect of concrete facts and real values. The mathematical formalism is in imitation of nineteenth century physics (economics viewed as the mechanics of utility and self-interest), but without any empirical basis remotely comparable to physics. Pareto is identified a villain here, and to a lesser extent Jevons…